Xiaomi’s Two-Speed Recovery: A 30-Day Rally Masks Deep Structural Faults
Published on 07/28/2026 at 18:41 | Redaktion boerse-global.de
The story of Xiaomi’s stock in recent weeks is one of two competing narratives, each pulling in opposite directions. On one hand, the shares have staged a dramatic 35–38% recovery over the past 30 days, propelled by a combination of an upgraded smartphone sales target, a chip-company IPO windfall, and fresh momentum in the electric-vehicle division. On the other, the company’s first-quarter earnings revealed a brutal 43.1% plunge in adjusted net profit, with the core smartphone business bleeding margin and the EV unit still losing roughly $5,600 on every vehicle sold. Reconciling these two realities is the central challenge for investors.
The immediate catalyst for Monday’s 7% surge was a pair of developments. Xiaomi announced an aggressive SUV model offensive, with CEO Lei Jun set to unveil two new family-segment SUVs in a keynote on July 30. Separately, ChangXin Memory Technologies (CXMT), a memory-chip maker in which Xiaomi holds a stake, went public — a listing that instantly boosted the value of Xiaomi’s investment portfolio. The rally extended into Tuesday, with the stock trading at €3.39, up 4.61% on the day, and showing a 10.25% gain over the past week.
Yet the technical picture tells a more cautious story. The stock remains 48.76% below its September 2025 high of €6.51, and the 200-day moving average still sits 9.66% above the current price — a sign that the medium-term trend has not yet reversed. Annualized volatility of 51.42% underscores just how much of this move is driven by short-term speculative flows rather than fundamental conviction.
The upbeat narrative gained further traction over the weekend when Xiaomi raised its 2026 smartphone sales target from 90 million to 110 million units. Management cited a faster-than-expected stabilization of supply chains and falling prices for DRAM and NAND memory components — the very same chips that had previously squeezed margins. The company is positioning itself as an early beneficiary of the component-cost cycle, hoping to gain a competitive edge over rivals still working through expensive inventory.
Should investors sell immediately? Or is it worth buying Xiaomi?
But the first-quarter results, released in late May, paint a more sobering picture. Revenue fell 10.9% to 99.14 billion yuan, though that still beat analyst expectations. The adjusted net profit of 6.07 billion yuan, however, was a different story — down 43.1% year-on-year, hammered by soaring memory-chip procurement costs and the drag from EV operations. The company has tried to shift the narrative away from its low-margin smartphone core toward the growing EV business, where monthly deliveries of the SU7 and YU7 models rebounded above 30,000 units in April after a soft start to the year.
Adding to the complexity, reports emerged on July 13 of a gradual workforce reduction across the smartphone, automotive, and internet divisions. Xiaomi denies mass layoffs, calling the changes “regular team adjustments” — language that leaves considerable room for interpretation. Meanwhile, a share buyback program of up to 20 billion Hong Kong dollars, launched in June, continues to run in the background, an acknowledgment from management that the stock is under sustained selling pressure.
Founder Lei Jun has also put his own money on the line. In November 2025, he purchased Xiaomi shares worth 100 million Hong Kong dollars at an average price of HK$38.58 per share — a vote of confidence that predates the current rally but reinforces the sense that insiders see value at these levels.
Xiaomi at a turning point? This analysis reveals what investors need to know now.
The next major test comes on August 18, when Xiaomi reports second-quarter 2026 earnings. That report will reveal whether the upgraded smartphone target is more than a one-off benefit from cheaper memory chips, and whether the EV division can narrow its losses as production scales. Until then, the stock is caught between a powerful short-term momentum story and a set of structural challenges — margin compression in phones, deep losses in cars, and a valuation that technical indicators now flag as overbought. The Nürburgring headlines and IPO gains may keep the rally alive for now, but the underlying numbers will eventually demand an answer.
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